Retirement Protection and American Savings Patterns

•         A new study that surveyed 1,900 Americans found:

• 50% of Americans said they “certainly would not” or “probably would not” be able to come up with $2,000 in the event of an unanticipated event, such as an unexpected medical bill.  
• The majority said they would have to rely on more than one method to come up with the emergency funds.
• 60% said they would dip into savings
• 34% said they would have to ask family and friends for help
• 29% said they would have to resort to credit cards, a home equity line of credit, reverse mortgage or unsecured loan
  – Lusardi, Annamaria, Daniel Schneider, and Peter Tufano. “Financially Fragile Households: Evidence and Implications.” The National Bureau of Economic Research. Bulletin on Aging and Health, May 2011. Web. <http://www.nber.org/papers/w17072>.
• In 2007, the median income of households that include any working-age people with disabilities in the U.S. was $38,400.
  – U.S. Census Bureau, American Community Survey, 2007
• Over 70% of working Americans do not have enough savings to meet short-term emergencies.
  – National Investment Watch Survey, A.G. Edwards Inc., 2004
• Over 50% of the workforce has no private pension coverage and a third have no retirement savings.
  – Social Security Administration, Fact Sheet 2007
• 71% of American employees live from paycheck to paycheck.
  – American Payroll Association, “Getting Paid in America” Survey, 2008
• Only 40% of adult Americans have separate emergency savings funds.
  – National survey commissioned by the Consumer Federation of America (CFA) and carried out by Opinion Research Corporation, February 2007
• More than 35% of workers with 401(k) or IRA plans have not thought about or don’t know what would happen to their contributions if they were unable to earn an income for a period of time.
  – Council for Disability Awareness, 2007 Disability Survey